SerenityBay ~ Indonesia Stock Market Watch, Analysis and Forecast ~

“Serenity is not freedom from the storm, but peace amid the storm”.
SerenityBay is dedicated for traders, investors and stockholders, who risk their life in stock, to have peaceful mind and soul amid the stormy market. We concentrate our analysis on the Indonesia Stock Market using Elliott Wave Principle.
Never Trading Stocks Without Serenity!

Unique Visitors Stats

Serenity Search

Words seem inadequate to express the sadness we feel for the Jakarta Hotel Blasts...Although no words can really help to ease the victims and their families, just know that you are very close in every thought and prayer...You have our deepest sympathies.

One good tips for investors when looking for a stock to buy is try to find an undervalued stock rather than a cheap stock.

It is hard sometimes to differentiate an undervalued stock and a cheap stock. One thing we should remember is that an undervalued stock is a stock that its price in the market is less than its intrinsic value. On the other side, a cheap stock is a stock that its price is relatively less than the other stocks in the market.

Let's take BTEL as an example. Is it a cheap stock? the price is only 50 though. It's should be cheap right? But is it undervalued stock? Well, according to our valuation model, the intrinsic value of BTEL is around 30. Hence, if it is sold around 50 then it is almost 70% too expensive. Let's take GGRM as a comparison. GGRM last traded price was 5500. It is 110 times BTEL's price. Looks expensive huh?? According to our valuation model, the intrinsic value of GGRM is 8400. It is actually undervalued and if it is sold at 5500 it is quite cheap.

Buying an undervalued stock is less risky than buying a cheap stock. Undervalued stock has so-called margin of safety, which is the positive different between the intrinsic value minus the price. After buying the undervalued stock, what we have to do is sit back and relax until the market realize the true value of the stock. Only after that we could realize our profit. We have provided some sample of undervalued stocks in our StockPicks section. But don't forget to do your homework and master the stock valuation to find the undervalued stocks by yourself.

Business cycle is the periodic but irregular up-and-down movement in production and jobs. A business cycle has 2 phases - recession and expansion - and 2 turning points - peak and trough. Calverley (2003, pp. 15-19) classifies business cycle stages and attractive investment opportunities as:

recovery: country's cyclical stocks and commodities.

early expansion: country's stocks and property.

late expansion: country's bonds and interest rate sensitive stocks.

early recession: country's bonds and interest rate sensitive stocks.

recession: country's stocks and commodities.

Considering this short overview, people should know what to buy by now. Everyone has agree that we are in the recession period, right?! So, what are we waiting for?? Go for commodities and government related stocks.

Followers

Readers Subscription

Serenity Subscribers

E-Mail Subscription

Serenity Recommendations

Serenity Buy

Disclaimer

This material was prepared by Hermawan Suryawijaya, Head of Security Analyst at Seruling Capital. This material is provided for informational purposes only and nothing herein shall constitute an offer to issue or sell, or an invitation to offer, or a solicitation, to buy or subscribe for, any security or other financial instrument or investment. While based on information believed to be reliable, this material and its contents are provided on an “as is” basis, no guarantee is given that this material or any of its contents is accurate or complete and Seruling Capital accepts no liability for loss arising from reliance on or use of this material. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material are as of the date indicated and are subject to change at any time without prior notice. Past performance is not indicative of future results. Further, any prices or values mentioned herein are as of the date indicated and are given for information only, and no representation whatsoever is made that any trade or transaction can be executed or effected at these prices or values, whether at the date or time indicated or otherwise. Seruling Capital may have issued other materials that are inconsistent with, or reach different conclusions from, the contents of this material. As this material is intended for general circulation, Seruling Capital has NOT taken any steps to ensure that the investments, tools, strategies and/or other materials referred to herein are suitable for any particular investor or particular class of investors, or takes into account the specific investment objectives, financial situation or particular needs of any particular person. Therefore, advice should be sought by the recipient of this material from a financial adviser regarding the suitability of such investments, tools, strategies and/or materials taking into account the specific investment objectives, financial situation or particular needs of the recipient before it makes any investment decision. Nothing in this material constitutes financial, investment, legal, accounting or tax advice nor a representation or recommendation that any investment or strategy is suitable or appropriate for any particular person’s circumstances. Seruling Capital or its officers, directors, employee benefit programmes or employees, including persons involved in the preparation or issuance of this material, may from time to time have interests or positions, or may effect transactions, in securities, warrants, futures, options, derivatives or other financial instruments referred to in this material, and may otherwise have relationships with or financial interests in or other business arrangements with any or all of the entities mentioned in this material.